MCB Bank has posted consolidated net profit after tax of Rs25.5 billion (EPS: Rs22.96) for the year ended 31st December 2015 (CY15) as compared to net profit of Rs24.7 billion (EPS: Rs22.15) for CY14, up 4%YoY. The result was below expectations with the deviation coming from higher than expected provisions. For 4QCY15 alone, the Bank recorded 19% decline in profit to Rs5.4 billion (EPS: Rs4.85) as against profit of Rs6.6 billion (EPS: Rs5.94) for the same period a year ago. The Board of Directors also approved a final dividend of Rs4.0/share taking total CY15 payout to Rs16.0/share.
The Key CY15 result highlights include: 1) net interest income (NII) was up 13%YoY on balance sheet growth, 2) there provisions worth Rs543 million as compared to reversals of Rs1.4 billion during the previous year, 3) there was an impressive 24%YoY non-interest income growth led by capital gains and dividend income and 4) a 7%YoY increase in expenses. The sequential downtrend in profitability a decline of 19%QoQ was primarily on account of higher provisions worth Rs1.6 billion during 4QCY15 against reversals of Rs1.1 billion during 9MCY15. Having lost 4% CYTD, MCB’s under performance has opened up valuations where its share currently trades at an attractive value.